TABLE OF CONTENTS

HISTORY OF E COMMERCE:......................................................................................... 2
SCOPE OF E COMMERCE:............................................................................................ 4
CHALLENGES OF E COMMERCE:.................................................................................. 7
Understanding customer evolution.........................................................................7
Charting changing technology................................................................................ 7
Weathering the storm.............................................................................................. 7
Integrating offline & online activities.......................................................................7
Identifying key levers of competitive advantage.....................................................7
Expanding globally.................................................................................................. 8
ROLE OF E COMMERCE:.............................................................................................. 8
Exploitation of New Business.................................................................................. 8
Enabling the Customers.......................................................................................... 8
Improvement of Business Transaction.....................................................................8
Effective Performance............................................................................................. 8
Greater Economic Efficiency.................................................................................... 8
Execution of Information......................................................................................... 8
Incorporating Transaction........................................................................................ 9
Increasing of Revenue............................................................................................. 9
Reduction of Friction................................................................................................ 9
Facilitating of Network Form.................................................................................... 9
Facilitating for Organizational Model.....................................................................10
AMAZON:.................................................................................................................. 10
EBAY:........................................................................................................................ 10

What is e-commerce?
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Electronic commerce or e-commerce refers to a wide range of online business activities for
products and services. It also pertains to "any form of business transaction in which the parties
interact electronically rather than by physical exchanges or direct physical contact.
E-commerce is usually associated with buying and selling over the Internet, or conducting any
transaction involving the transfer of ownership or rights to use goods or services through a
computer-mediated network.
Though popular, this definition is not comprehensive enough to capture recent developments in
this new and revolutionary business phenomenon. A more complete definition is
E-commerce is the use of electronic communications and digital information processing
technology in business transactions to create, transform, and redefine relationships for value
creation between or among organizations, and between organizations and individuals.

HISTORY OF E COMMERCE:
Ecommerce was introduced 40 years ago and, to this day, continues to grow with new
technologies, innovations, and thousands of businesses entering the online market each year. The
convenience, safety, and user experience of ecommerce has improved exponentially since its
inception in the 1970s. This article will address some of the key players and milestones of
ecommerce.
1960-1982
Paving the way for electric commerce was the development of the Electronic Data Interchange
(EDI). EDI replaced traditional mailing and faxing of documents with a digital transfer of data
from one computer to another.
Trading partners could transfer orders, invoices and other business transactions using a data
format that met the ANSI ASC X12, the predominant set of standards in North America.
Once an order is sent, it is then examined by a VAN (Value-Added Network) and finally directed
to the recipients order processing system. EDI allowed the transfer of data seamlessly without
any human intervention.
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Michael Aldrich, an English inventor, innovator and entrepreneur is credited with developing the
predecessor to online shopping. The idea came about during a stroll with his wife and Labrador
when Aldrich lamented about their weekly supermarket shopping expedition. This conversation
sparked an idea to hook a television to their supermarket to deliver the groceries. Immediately
after the discussion Aldrich quickly planned and implemented his idea.
In 1979 Aldrich connected a television set to a transaction processing computer with a telephone
line and created what he coined, teleshopping, meaning shopping at a distance.
1982-1990
It was apparent from the beginning that B2B online shopping would be commercially lucrative
but B2C would not be successful until the later widespread use of PCs and the World Wide Web,
also known as, the Internet. In 1982, France launched the precursor to the Internet called,
Minitel.
The online service used a Videotex terminal machine that was accessed through telephone lines.
The Minitel was free to telephone subscribers and connected millions of users to a computing
network.
By 1999, over 9 million Minitel terminals had been distributed and were connecting
approximately 25 million users in this interconnected network of machines. The Minitel system
peaked in 1991 and slowly met its demise after the success of the Internet 3 years later.
Eventually, in 2011, France Telecom announced its shutdown of the Minitel service system.
Sadly, it had not become what it had hoped to be, the Internet.
90s To Present
In 1990 Tim Berners Lee, along with his friend Robert Cailliau, published a proposal to build a
Hypertext project called, WorldWideWeb. The inspiration for this project was modeled after
the Dynatex SGML reader licensed by CERN.
That same year, Lee, using a NeXTcomputer created the first web server and wrote the first web
browser. Shortly thereafter, he went on to debut the web on Aug. 6, 1991 as a publicly available
service on the Internet. When Berners Lee decided he would take on the task of marrying
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hypertext to the Internet, in doing that, the process led to him developing URL, HTML and
HTTP.
When the National Science Foundation lifted its restrictions on commercial use of the NET in
1991, the Internet and online shopping saw remarkable growth. In September 1995, the NSF
began charging a fee for registering domain names. 120,000 registered domain names were
present at that time and within 3 years that number grew to beyond 2 million. By this time,
NSFs role in the Internet came to an end and a lot of the oversight shifted to the commercial
sector.

SCOPE OF E COMMERCE:
E-commerce is a very hot issue these days. After the revolution of Internet, more and more
countries are getting involved in it. However, in general, if we use any type of electronic devices
in getting orders and sending catalogues, like telephone, fax or any other such instruments, we
are supposed to be applying electronic business techniques.
However, the real sense of e-commerce is the business on the internet of which there are
different modes, like opening a retail store on internet, where all transactions are done on line,
from selection of product to payment of bills. The over-all volume of e-commerce is more than
$4 billion annually. Doing business on internet is not a very costly investment. It is estimated that
in near future, almost 25 per cent of the traditional business will be converted into internet
business.
Trends: E-commerce is an information technology trend developing fast in the business world.
The corporate and the business world, aptly supported by the IT industry, already stands
transferred, which by recent estimate will exceed $400 billion this year.
As we start warming up to global e-commerce in Pakistan, we must understand that almost 78
per cent of the e-commerce activity takes place in the USA, obviously driven by the use of
internet in that country. As the January 2000, over 110 million people have internet access there
compared to 279 million the world over.

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Nevertheless, Pakistan can make good use of this opportunity with proper planning and
execution. To begin with, let us focus on the domestic front before going all out for the global
market.
Domestic activity: Offer for improving and productivity to bring it to the excellent level. It also
allows our entrepreneur to test their web business and marketing skills before taking on the
international markets. E-commerce is not for all but for those who understand it. Yet, ecommerce is not a technology.
The issue at the individual level, it is purely a business matter. At the govt level, it is a matter of
providing infrastructure for transactions on internet-commerce or business through internet is
becoming very popular mode of trading around the world particularly in the developed world.Ecommerce is a broad term used to quantify the trading taking place on the internet.
Most studies, however, suggest that e-commerce runs through four steps. The very first step is, to
build a website to let the world know about your existence. The website contains information
about the company, product/services and other related information, which can help visitors to
learn more about the hosts. The second step involves asking customers to lose their pockets and
buy on line.
This step requires adopting advance level of software capable of handling orders. In the third
stage inventory, management adds to the system and lastly, providing provisions of payments
through online banking partnership between buyers and sellers, the most difficult and complex
part of e-commerce.
The most common and popular forms of e-commerce are business-to-consumers (B2C) and
business-to-business (B2B). Business-to-government (B2G) and government-to-citizens (G2C)
are other forms, running on the internet but with low steam. However, the use of former two still
dominates the internet.
However, Pakistan is still far behind in chasing the west in this regard. Entrepreneurs in Pakistan
are of the opinion that e- commerce means being able to make and receive payments through
internet and any other activity through internet is not considered as e-commerce. This low level

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of understanding has led many Pakistani firms to give low priority to e-commerce due to
unavailability of proper framework for the internet in the country.
In Pakistan, e-commerce is still in its infancy and faces many barriers to grow. The notable
barriers are: unavailability of proper infrastructure [telephone line of stem lines of steam age,
frequent failures of power] limited user of internet hardly one per cent of the entire population
have access to the internet], the issue of security of transactions on the internet, high bandwidth
rates, and last but not least the rigid and monopoly role of the PTCL.
However, the SBP has recently put a crack on the barriers when it approved the merchant ID
accounts to facilitate online transactions. But there is still a long way to go and requires
government to continue to grease the wheels of e-commerce to speed up the process.
Prospects: Those who create, distribute, and sell goods and services to consumers also have
reason to look forward to this new mechanism. All enterprises, including the small and medium
sized can reach customers throughout the world instantly and comparatively inexpensively.
Many vendors can sell globally without the costly infrastructure of worldwide retail stores, sales
offices,distributors,or warehouses.
Greater sales and inventory efficiency maybe possible through the increased interaction with
prospective customers that electronic commerce can afford. One to one marketing becomes
possible on massive and global scale. Active and alert supplier will also benefit from the new
structure of product and service distribution likely to results from electronic commerce. With
conventional distribution ,a manufacturer must reply to wholesalers and retailers to serve
customers in large volumes. E-commerces automated customers self-service capabilities can
eliminate the need for these intermediaries .The manufacturer no longer has to share profit with
others. In addition, the manufacturer gains direct contact with consumers that can facilitate future
sales.
With this, as the role of conventional intermediariessuch as retail store clerks, travel agents,
bank tellers, and wholesale representatives may diminish or end, new intermediaries have started
to appear.

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Electronic commerce connects manufacturers directly to consumers. The consumer gets product
information directly from the ultimate source. The manufacturer can get customer preferences
and needs directly from the ultimate source. Each consumers physical location no longer
determines whom the consumers contacts to purchase a product. With the purchase of
intangibles that can be delivered electronically, physical location becomes irrelevant to product
delivery as well. The internet makes the connection between a French consumer and an Egyptian
supplier virtually indistinguishable from the connection between a Persian consumer and a
Parisian consumer and Parisian manufacture.
It can be concluded that there is a lot of scope of e- commerce in Pakistan, and most companies
are eager to going to the digital world, but at present due to absence of any policy framework and
limited internet market, companies are holding their plans to start e-business until clouds of
barriers as discussed are disappeared.

CHALLENGES OF E COMMERCE:
Understanding customer evolution
Invest ahead of customer needs

Charting changing technology

Match technology choices to consumer tastes

Weathering the storm

Reassure stakeholders with clear vision, sensible business model, and profitable venture

Integrating offline & online activities

Align offline & online business activities, esp. advertising, branding, retail & online store
design, service, warranties, returns (customer-facing activities)

Identifying key levers of competitive advantage

Reallocate resources as competitive advantage levers evolve

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Expanding globally
Deal with complex internationalization issues

ROLE OF E COMMERCE:
Exploitation of New Business
Broadly speaking, electronic commerce emphasizes the generation and exploitation of new
.business opportunities and to use popular phrases: generate business value or do more with
less.

Enabling the Customers

Electronic Commerce is enabling the customer to have an increasing say in what products are
made, how products are made and how services are delivered (movement from a slow order
fulfillment process with little understanding of what is taking place inside the firm, to a faster
and rt1ore open process with customers having greater control.

Improvement of Business Transaction

Electronic Commerce endeavors to improve the execution of business transaction over various
networks.

Effective Performance
It leads to more effective performance i.e. better quality, greater customer satisfaction and better
corporate decision making.

Greater Economic Efficiency

We may achieve greater economic efficiency (lower cost) and more rapid exchange (high speed,
accelerated, or real-time interaction) with the help of electronic commerce.

Execution of Information
It enables the execution of information-laden transactions between two ore more parties using
inter connected networks. These networks can be a combination of plain old telephone system

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(POTS), Cable TV, leased lines and wireless. Information based transactions are creating new
ways of doing business and even new types of business.

Incorporating Transaction
Electronic Commerce also inco11'orates transaction management, which organizes, routes,
processes and tracks transactions. It also includes consumers making electronic payments and
funds transfers.

Increasing of Revenue
Firm use technology to either lower operating costs or increase revenue. Electronic Commerce
has the Potential to increase revenue by creating new markets for old products, creating new
information-based products, and establishing new service delivery channels to better serve and
interact with customers. The transaction management aspect of electronic commerce can also
enable firms to reduce operating costs by enabling better coordination in the sales, production
and distribution processes and to consolidate operations arid reduce overhead.

Reduction of Friction
Electronic Commerce research and its associated implementations is to reduce the friction in
on line transactions frictions is often described in economics as transaction cost. It can arise from
inefficient market structures and inefficient combinations of the technological activities required
to make a transaction. Ultimately, the reduction of friction in online commerce will enable
smoother transaction between buyers, intermediaries and sellers.

Facilitating of Network Form

Electronic Commerce is also impacting business .to business interactions. It facilitates the
network form of organization where small flexible firms rely on other partner, companies for
component supplies and product distribution to meet changing customer demand more
effectively. Hence, an end to end relationship management solution is a desirable goal that is
needed to manage the chain of networks linking customers, workers, suppliers, distributors and
even competitors. The management of "online transactions" in the supply chain assumes a
central role.

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Facilitating for Organizational Model

It is facilitating an organizational model that is fundamentally different from the past. It is a
control organization to the information based organization. The emerging forms of technoorganizational structure involve changes in managerial responsibilities, communication and
information flows and work group structures.

AMAZON:
The mid-nineties to 2000s saw major advancements in the commercial use of the Internet. The
largest online retailer in the world Amazon, launched in 1995 as an online bookstore. Brick-andmortar bookstores were limited to about 200,000 titles and Amazon, being an online only store,
without physical limitations was able to offer exponentially more products to the shopper.
Currently, Amazon offers not only books but DVDs, CDs, MP3 downloads, computer software,
video games, electronics, apparel, furniture, food, and toys. A unique characteristic of Amazons
website is the user review feature that includes a rating scale to rate a product. Customer reviews
are now considered the most effective social media tactic for driving sales. The company attracts
approximately 65 million customers to its U.S. website per month and earned revenue of 34.204
billion in 2010. In 2001, Amazon.com launched its first mobile commerce site.

EBAY:
Another major success story of the dot com bubble was Ebay, an online auction site that debuted
in 1995. Other retailers like Zappos and Victoria Secret followed suit with online shopping sites;
Zappos being a web only operation.
Also in 1995, was the inception of Yahoo followed by Google in 1998, two leading search
engines in the US. These successful web directories began their own ecommerce subsidiaries
with Google Shopping and Yahoo! Auction, in following years.

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Priceline:
Step 1: Choose your vacation destination
This was going to be our inaugural vacation with Baby Girl, so we decided wed keep it within
a few hours of home. We narrowed our options to the Outer Banks and Hilton Head. After doing
a few basic hotel and rental searches in both areas, I found that our dollar would go farther at
Hilton Head. And since Joanna had vacationed there growing up, I thought itd be nice to go
somewhere with a little familiarity.

Step 2: Research the area

So were going to Hilton Head awesome! Now its time to explore the lay of the land: good
areas, not-so-good areas, proximity to nearby attractions (like the beach), range of available
hotels, etc. This is a crucial step of the research phase. If youre planning on a beach vacation,
you dont want to bid on hotels that arent near/on the beach. You can obviously do some of this
research during the bidding process, but I like to familiarize myself before I put my game face
on, which looks sorta like Chuck Norris.

Step 3: Scope out the competition

Having already done a price comparison of Hilton Head vs. Outer Banks, I knew what the
general price range was and it wasnt very cheap using a normal search. Thats
where Hotwire and Pricelines new Express Deals come in. These sites work off a similar model
to Name Your Own Price. Hotels make money when people are in their hotels even if theyre
not paying the standard rate. So to fill these rooms, hotels will offer deeply discounted rates with
the caveat being that they dont disclose the name of their hotel until AFTER the room is booked.
Fair enough.
When I pulled up a search on these sites, I noticed a 4* hotel for $90 on Hotwire and $80 on
Priceline. Awesome. I was open to anything above 3* for this trip, so a 4* that was cheaper than
most 3* definitely looked interesting.

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Step 4: Know what youre bidding on

Time to get sneaky. For this step, Ive always relied on BetterBidding, but I recently found
another site called Bidding for Travel thats similar. Both of these forums provide valuable
information and resources for making more informed bids. Better said, theyll help you figure
out what secret hotels you might be bidding on or booking immediately in the case of
Hotwire/Express Deals.
Since I had already found a really good deal, I wanted to figure out which hotel it was and if it
was available on Name Your Own Price (where Id be able to snag it even cheaper). On Hotwire
and Express Deals, they list some of the hotels amenities. These are the key to deducing which
hotel youre looking at. I clicked on over to the South Carolina Hotwire forum and started
comparing amenities to the hotels listed. Beachfront, Oceanfront, Spa, etc. Any one of these
amenities by itself wont reveal the hotel. But combined, I realized that the only hotel that listed
the combination of amenities shown on Hotwire was the Westin. I spent a little time researching
the Westin on Trip Advisor and based on the reviews, it appeared freaking awesome. Right on
the beach, recently renovated family friendly.
Now that I knew the specific hotel, I looked to see if it was a Name Your Own Price hotel. I
visited the South Carolina Priceline forum, scrolled down to Hilton Head Island and sure
enough, the Westin was one of the 4*/Resort hotel options. Its game time.

Step 5: Bid away

Alright, to recap, weve figured out where to vacation, standard rates, secret rates, and figured
out that the Westin was offering a great deal and is a Price hotel. Nothing to it, right? Now its
time to actually make it happen. Ill preface this to say theres no perfect formula for bidding.
Sometimes it works, sometimes it doesnt. But its always exciting.
Since we had already figured out a budget for this trip (which should always serve as your
starting point), I knew we didnt want to spend more than $80/night. That would typically mean
that my bidding would be limited to 2* or 3* hotels. But since I knew the Westin was offering
ridiculously cheap rates almost within my budget already, I decided to go for it. I usually try to
start my bidding around 20%-25% lower than the cheapest deal Ive found, in this case $80.
Since it was already such a great deal, I entered a ah, what the heck bid of $65/night. I entered
my info, previewed the final cost with taxes, and told Joanna Im going to bid on it. Cool? at
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least four times (its a weird thing I always do to build my courage before clicking submit or
something), and finally pressed Submit.

BOOOOOOOOOOOOOOOOMMM!!!!!!!!!! GIVE ME SOME FREAKING SKIN, CAPTAIN KIRK!

Step 6: Celebrate the savings

When I pulled up the hotel this week to analyze the deal, a standard room rate was listed at $262.
Yeah, no. So Id say I got a pretty good deal. And having just gotten back from the resort last
week, I can say it lived up to the 4* billing.

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